Palm Oil Gains as Malaysia May Export More Before Tax in March

Feb. 18 (Bloomberg) -- Palm oil advanced for the first time
in four sessions on speculation that Malaysia may boost exports
this month before a tax is imposed in March, reducing near
record inventories in the world’s second-largest producer.

The contract for delivery in May, the most-active by open
interest and volume at close, climbed 1.3 percent to end at
2,539 ringgit ($819) a metric ton on the Malaysia Derivatives
Exchange. Futures declined 3 percent last week to end at 2,483
ringgit, the lowest price at close since Jan. 29.

The tax on crude palm oil exports will be 4.5 percent for
March after shipments were allowed at zero duty in January and
February, according to the Customs Department. That’s less than
the 9 percent tax set for this month by Indonesia, the biggest
producer and exporter. Shipments from Malaysia climbed 18
percent to 673,555 tons in the first 15 days of February from
the same period a month ago, surveyor Intertek said Feb. 15.

“It’s likely that Malaysian exporters may ship out more
palm oil to take advantage of the zero percent tax,” said Ker
Chung Yang, an analyst at Phillip Futures Pte in Singapore.

The rush to export more may help to cut stockpiles, Ivy Ng,
an analyst at CIMB Group Holdings Bhd., wrote in a report today.
Inventories in Malaysia slid 1.9 percent to 2.58 million tons
last month from an all-time high of 2.63 million tons in
December, the nation’s palm oil board said Feb. 13.

Refined palm oil for delivery in September lost 0.5 percent
to close at 7,056 yuan ($1,130) a ton on the Dalian Commodity
Exchange. Soybean oil for delivery in the same month dropped 0.8
percent to end at 8,646 yuan a ton. Financial markets in China
were closed last week for the Lunar New Year festival.